Project ReportOn

To speculate the factors influencing the customer’s perception of a shoe brand

Submitted In Partial Fulfilment of the Requirement

For the Degree of

PGDM

By

Sahil Arora (13A1HP044)Ridhima Chadha (13A3HP052)Aishwarya Singh (13A1HP062)

Dhruv Gauba (13A3HP025)Ishu Bansal (13A1HP044)

Under the Supervision ofDr. Bhaskar Basu

(February-2014)

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Executive Summary

Indian shoe brands like Lakhani, Liberty have always done well on the loyalty parameter among the customers, however, in the last few years brand loyalty among Indian consumers has eroded and foreign brands/products are perceived to be better than Indian products/brands.

Our project objective was to analyze what all factors are considered important today by the customers before deciding upon buying a shoe. Our project topic was

“To find out the factors influencing the customer’s perception of a shoe brand.”

Methodology adopted:

A descriptive research was under taken to find out the various factors that influenced the customer’s perception of a shoe brand. Under this a questionnaire was prepared with the help of the industry mentor, college mentor along with secondary data available from footwear magazines and internet. The questionnaire enlisted 25 variables which could be influencing the customer’s perception.

The data collected from the questionnaire was then fed into the statistical software SAS for factor analysis, to further improvise the factors and to find out major influencing factors out of the 25 specified in the questionnaire.

Major Findings:

The Software came out with 5 major factors that influenced the perception of the customer’s for a shoe brand. These were:-

1. Brand consciousness2. Customer Satisfaction3. Physical Appearance4. Credit Provision 5. Status Symbol

As per our findings we have also given some recommendation for each of the above factors.

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TABLE OF CONTENTS Page

INTRODUCTION........................................................................................4

1.1 Problem Statement.............................................................................4

1.2 Research Objectives...........................................................................4

1.3 Background/Review of Literature.....................................................5

METHODOLOGY.......................................................................................7

2.1 Sampling Design................................................................................7

2.2 Research Design................................................................................7

2.3 Data collection...................................................................................8

2.4 Data Analysis....................................................................................10

2.5 Limitations.......................................................................................23

FINDINGS..................................................................................................24

CONCLUSIONS/RECOMMENDATIONS..............................................25

APPENDICES............................................................................................27

BIBLIOGRAPHY......................................................................................29

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INTRODUCTION

PROJECT TITLE:

“To find out the factors influencing the customer’s perception of a shoe brand.”

1.1 Problem Statement

Why the long and well established Indian brands like Liberty shoes Pvt. Ltd. And Lakhani are showing a decline in growth rate as compared to established foreign brands like Nike, Puma and Adidas in Indian market which are showing a rise in growth rate.

1.2 Research Objectives

To analyze what all factors are considered important today by the customers before deciding upon buying a shoe.

To know the personal use of the people regarding various branded shoes. To study which shoe brand is mostly preferred by people as per their

choices. Comparison between various branded shoes. Finding out factors influencing the people at the time of purchasing shoes

such as quality, durability, variety and price.

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1.3 BACKGROUND

Indian Footwear Industry

The Indian market for footwear includes all producers of non-cleated, rubber and plastic footwear designed in style or for use. The industry is a collection of smaller, segmented, yet often overlapping markets, defined by both the price and the purpose of the shoes.For instance, there are mini-markets for shoes designed for each of many sports and other purposes: basketball, running, walking, tennis, and casual wear. The greatest overlap between these categories is between performance shoes and casual wear. Therefore, there is some degree of overlap between most segments. The industry is dominated by a few large firms, while the majority of other players have less than 5% market share. 

These firms fight for market share through non-price competition, on strategies such as strengthening brand image and increasing product proliferation. The success of each firm is greatly dependent upon its marketing campaigns. The brand image of the major firms is created by extensive marketing campaigns and celebrity endorsements. Consumers associate themselves with a particular brand and tend to stick with the brand with which they are comfortable. Entry to the industry is difficult as brand loyalties are high. Standing on the threshold of a retail revolution and witnessing a fast changing retail landscape, the Indian footwear market is set to experience the phenomenal growth in coming years

Mass Customization in Footwear Industry– Today’s Strategy, Future’s Necessity

Mass Customization has gained momentum over Mass Production in the footwear industry. There are many footwear players adopting this concept but at intermittent stages. The prime drivers of mass customization are technology, supply chain transformation and organizational restructuring. There has been major advancement on technological front starting from taking customer’s measurement through body scanning, to product development and finally to deliver the right kind of customized product to customer. There are plenty of supply chain changes happening at different

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level to customize the product and many small and large players are already there into this space.

Prevailing trends in footwear are high fashion value products and mass customization is the right solution to tap these customer insights. Players already in to mass customization would reap the benefits of first mover advantage and are expected to gain strong foothold in customization business. In coming 5 – 10 years, pure play mass customization players are found to be smaller companies and are recommended to capture the consumer insights and subsequently increase their offerings in customization so that they can increase their revenues. At the same time, biggies who are partially into mass customization are required to concentrate more on this business as a part of brand building activity. The shift of focus towards consumer preference sets the right platform for mass customization and future belongs to this strategy with many companies entering in this space offering multitude of options in customization at comparable prizes. If we glance at the increasing purchasing power and personalization of the end users, it will be imperative for retailers to involve in mass customization directly or indirectly.

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Research Methodology

2.1 Sampling DesignThe major chunk of the sample was concentrated in Delhi/NCR and Hyderabad region. We took a sample size of 160 people. The research was limited to the middle income group consumers who used to buy shoes of Indian brands but have now shifted their preferences towards foreign brands.

2.2 Research Design

A research design is a framework or blueprint for conducting the marketing research project. It details the procedures necessary for obtaining the information needed to structure or solve marketing research problems.

Figure 1

Descriptive Research was used to study the perceptions of product characteristics. As the name implies, the major objective of descriptive research is to describe something- usually market characteristics or functions. Descriptive research was conducted for the following reasons

1. To determine the perceptions of product characteristics.2. To determine the degree to which marketing variables are associated.3. To make specific predictions.

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Research Design

Conclusive Research

Design

Descriptive Research

Causal Research

Exploratory Research

Design

Statistical Design:

Factor Analysis, variable interdependence technique, in which the interrelationships among large number of variable (questionnaire responses) are analyzed and then they are represented in terms of common underlying dimensions (factors). It brought out the hidden or latent dimensions relevant in the relationships among product preferences.

Statistical Software: SAS is a comprehensive and flexible statistical analysis and data management solution. SAS can take data from almost any type of file and use them to generate tabulated reports, charts, and plots of distributions and trends, descriptive statistics, and conduct complex statistical analyses.

Statistics associated with factor analysis: Eigen value: It represents the total variance explained by each

factor. Factor loadings: Factor loadings are simple correlations

between the variables and the factors. Percentage of variance: It is the total variance attributed to

each factor.

2.3 Data collection

The research conducted was based entirely on the primary data which was collected from customers, retailers and distributors in the form of a questionnaire. A total of 160 respondents were surveyed in the Hyderabad and Delhi and NCR regions. But again it is important to mention that the data for coming up with the questionnaire was based on both, primary data collected from colleges and customers elsewhere, and secondary data collected from the footwear magazines and the internet.

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Scaling technique

A Likert scale is a psychometric scale commonly involved in research that employs questionnaires. It is the most widely used approach to scaling responses in survey research. When responding to a Likert questionnaire item, respondents specify their level of agreement or disagreement on a symmetric agree-disagree scale for a series of statements. Thus, the range captures the intensity of their feelings for a given item. A scale can be created as the simple sum questionnaire responses over the full range of the scale. In so doing, Likert scaling assumes that distances on each item are equal.An important distinction must be made between a Likert scale and a Likert item. The Likert scale is the sum of responses on several Likert items.A Likert item is simply a statement which the respondent is asked to evaluate according to any kind of subjective or objective criteria; generally the level of agreement or disagreement is measured. It is considered symmetric or "balanced" because there are equal amounts of positive and negative positions. Often five ordered response levels are used, although many psychometricians advocate using seven or nine levels.In the current research a Likert-5-points scale was employed with the following format:

1. Strongly agree2. Agree3. Neither agree nor disagree4. Disagree5. Strongly disagree

Questionnaire

The development of the questionnaire was a daunting task just next to getting it filled. Since we had little knowledge of the shoe industry, our first task was to gather as much knowledge as we could on the same. Here came our College mentor to our aid and he gave us a detailed overview of the industry. It is also here we came to know about our research target audience (the middle income group). Footwear specific magazines, which were another great source of information. And lastly, internet was also used for a lot of information intake.

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After all the information we thought we required, we started the process of formulating the questionnaire. The questionnaire was prepared in a 5-point Likert scale format. There were 25 Likert items. A total of 160 responses were collected through the questionnaire.

The only problem faced was of gathering the demographic information as the respondents were not at all willing to disclose the personal information. The way out was to at least know that the respondents belonged to our researches’ target audience. For that, the survey was conducted in specified markets where maximum inflow is of the middle-income customers. This way we knew that our respondents are middle-income (this process was also aided by observation and estimation of the customers by us).

2.4 Data Analysis

Total Variance Explained

The Total Variance Explained table shows how the variance is divided among the 18 possible factors. In our case 5 factors have Eigen values (a measure of explained variance) greater than 1.0, which is a criterion for a factor to be useful.Hence, we get 5 useful factors out of a total of 18 possible factors.

Results and Conclusion

The research on finding out the factors influencing the customers’ perception of a shoe brand was started off with 18 possible factors that could have influenced the customers’ perception. Of these 18 factors, 5 were selected to be finally analysed by the Software SAS for factor analysis.

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Rotated Factor Pattern

Variables

Brand Consciousness

Customer Satisfaction Appeal Credit

Status Symbol

Higher price reflects better quality 0.63291Past brand experience 0.60825

Run long miles 0.58468Pay extra for better appeal 0.69716Large variety of shoe range 0.73287Exclusive showrooms 0.79163Availability of the brand online 0.67346Wider range of variety being offered by International shoe brands 0.68678

Past vendor experience 0.70719option of extended warranty 0.70879Option of replacement for extra cost 0.62817More weight means better durability 0.66389Opinion leaders represent true picture 0.68574

Celebrity Endorsements 0.69626Liking for the shoe to the extent of buying it of the wrong size 0.70197Provision of EMI 0.59903Brand Recognition & Equity 0.83462Higher the price higher the status 0.66768Variance Explained by Each Factor 4.614812 3.1720153

2.6736704 2.0190243

1.3878184

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Graphical Representation

Do you believe that higher the price higher the status?

1 17 10%

2 50 29%

3 63 37%

4 28 16%

5 13 8%

Does Past brand experience play a role in purchase of a shoe?

1 28 17%

2 72 44%

3 38 23%

4 20 12%

5 6 4%

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Do you expect your shoes to run long miles?

1 30 18%

2 46 27%

3 46 27%

4 36 21%

5 12 7%

Would you pay extra for better appeal?

1 23 14%

2 59 35%

3 50 30%

4 27 16%

5 10 6%

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Would you prefer a brand with large variety of shoe range?

1 25 15%

2 61 36%

3 52 31%

4 23 14%

5 8 5%

Does availability of exclusive showrooms uplift a brand?

1 22 13%

2 73 43%

3 44 26%

4 24 14%

5 7 4%

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Does availability of the brand online attract people toward the brand?

1 19 11%

2 70 42%

3 51 30%

4 21 13%

5 7 4%

Do international shoe brands offer wider range of variety?

1 21 13%

2 65 39%

3 58 35%

4 20 12%

5 4 2%

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Does Past vendor experience play a role in purchase of a shoe?

1 19 11%

2 73 43%

3 42 25%

4 25 15%

5 9 5%

Is option of extended warranty for extra cost a lucrative offer from the brand?

1 16 9%

2 71 42%

3 47 28%

4 23 14%

5 12 7%

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Is option of replacement for extra cost a lucrative offer from the brand?

1 14 8%

2 77 46%

3 47 28%

4 23 14%

5 7 4%

Do you believe that more weight means better durability?

1 14 8%

2 36 21%

3 56 33%

4 41 24%

5 23 14%

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Does Opinion leaders represent true picture of the brand?

1 10 6%

2 52 31%

3 53 31%

4 38 22%

5 16 9%

Does Celebrity endorsement affect your buying decision?

1 13 8%

2 51 30%

3 51 30%

4 33 19%

5 23 13%

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Would you ever buy shoes in the wrong size just because you like them so much?

1 15 9%

2 53 31%

3 37 22%

4 26 15%

5 40 23%

Would provision of EMI lead you to buy expensive shoes?

1 17 10%

2 43 25%

3 56 33%

4 35 20%

5 20 12%

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Will you pay more for the same product offered by two different brands?

1 14 8%

2 72 42%

3 50 29%

4 24 14%

5 13 8%

Do you believe that higher the price higher the status?

1 14 8%

2 65 38%

3 44 26%

4 37 22%

5 11 6%

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Which of the following brands would you prefer?

Nike 55 32%

Puma 60 35%

Red Tape 34 20%

Lakhani 9 5%

Liberty 15 9%

How much are you willing to spend on shoes?

< Rs 500 3 2%

Rs. 500 - Rs. 1000 35 21%

Rs. 1000 - Rs. 2000 56 33%

Rs. 2000 - Rs. 3000 55 32%

> Rs. 3000 21 12%

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What type of shoes do you prefer?

Sport Shoe 41

24%

Casual shoe - fancy 71

42%

Leather shoe 36

21%

Trekking shoe 12

7%

Canvas 9 5%

Which age group do you lie in ?

Below 18 12 7%

18 – 35 152 90%

35 – 60 4 2%

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60 + 0 0%

2.5 Limitations of the Research

The research suffers from the quality of the composition of the sample. By virtue of consisting of mostly student shoppers, the sample was not sufficiently heterogeneous. The limited heterogeneity in respondents' demographic characteristics could have affected both the nature and the extent of the predictor variables.

1. The duration of the project was just the 2-month period. The customers were generally very busy and so, it was really very difficult to get time from them to fill-up the questionnaires. Also, retailers and especially distributors were very reluctant to provide information which was very necessary for the purpose of the study.

2. Attitudes of the population for one particular item in reality exist on a vast, multi-dimensional continuum. However, the Likert Scale is uni-dimensional and only gives 5-7 options of choice, and the space between each choice cannot possibly be equidistant. Therefore, it fails to measure the true attitudes of respondents. Also, it is not unlikely that peoples’ answers will be influences by previous questions, or will heavily concentrate on one response side (agree/disagree). Frequently, people avoid choosing the “extremes” options on the scale, because of the negative implications involved with “extremists”, even if an extreme choice would be the most accurate.

3. Our research was concentrated to the Delhi/NCR and Hyderabad region only. Metropolitan cities like Kolkata, Mumbai, and Chennai were not a part of the research and hence it may not represent the true picture of the entire population. In some cases there are different products for different cities and consumers from different areas may have different perception about the brand.

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FINDINGS

Out of 18 factors we found 5 factors which had Eigen values more than 1.These factors explained all the 18 variables that we had formulated in our research design. We saw that our major sample size consisted of people lying in the age group of 18-35.

The major chunk of the population was concentrated in Delhi/NCR and Hyderabad region. We inferred from the research that Indian shoe brands are losing their brand equity over foreign brands. The result of the research shows that foreign brands are more preferred than Indian brands.

We could also relate to the fact that people take pride in buying the same product offered at a higher price simply due to the status consciousness in their mind.

Yes celebrity endorsements is an important factor in marketing a product but from our research we found out that product appeal, it’s variety and price are more influential than the former.

In a market where advertising plays a vital role in coordinating consumer purchases, it becomes pertinent for companies to induct all possible measures to influence, motivate and inculcate desire to purchase, in the customer through an effective advertising campaign.

We also found out that magazines or website reviews serve as important information along with manufacturer or retail websites of brand provide important information.

So, we can say that consumers pay equal attention to the service and information provided by the brand and the appeal of the brand.

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RECOMMENDATIONS

1. So we can say that customers relate highly to the reputation of brand as well as the appeal of the brand’s product.

2. We can recommend that Product customization requires special attention. It is a new trend that is yet to hit the shoe industry with full impetus. Customization of the product is the real game changer. Primarily because it is not yet prominent in the Indian shoe industry but the market demands customization. As per a research, in coming 5 – 10 years, pure play mass customization players will be smaller companies. So it is recommended to capture the consumer insights and subsequently increase offerings in customization so that the Indian footwear brands can increase their revenues and to be first in this market would surely reap enormous benefits in terms of brand image, market share, and profits.

3. Also we can say that customers find heavy shoes pain so they should avoid them.

Also celebrity endorsements are an attractive feature but not very important so they should focus more on their product appeal and offer a wide range of variety. Small scale private players have started importing shoes which are completely manufactured and assembled in China and then sell it here in the name of their respective brands. The markets have been flooded with such products. And the sole reason for their success is the availability of numerous designs. Indian players on the other hand have very limited designs to offer and any new design takes at least 3-4 months to come into the market. Hence it is recommended that the company comes up with more designs and that too with in short span of time, to make the products more appealing to the customers.

4. Also customers relate highly to the quality of service provided in terms of outlets, websites, e-retail space and likewise. It is very important to keep a check on the retail outlets and especially the behaviour of the employees. I observed in most of the cases during my survey that the retail employees are a major influence in the purchase

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decision. The company can look towards ways of providing commissions to the retail outlet employees for promoting company’s brands.

5. Product durability is one of the recommended tools; the company needs to ensure a defect free product. Furthermore, it can provide the customers with replacement schemes. This would do the following things:-

Delight the customers Help create an strong positioning in the mind of the customers Increase customer loyalty Good experience with the product would lead to promotion of

the organization by positive word-of-mouth

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APPENDICES: Questionnaire

Strongly agree Agree

Neither agree nor disagree

Disagree

Strongly disagree

1 2 3 4 5Brand Equity

1Will you pay more for the same product offered by two different brands

2Do you believe that higher the brand higher the appeal

Price

3Do you believe that higher the price higher the status

4Do you believe that higher price reflects better quality

5Would provision of EMI lead you to buy expensive shoes Durability

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Do you expect your shoes to run long miles?Weight and Size

7Do you believe that more weight means better durability

8

Would you ever buy shoes in the wrong size just because you like them so much

Appeal

9Would you pay extra for better appeal

10 Would you buy a shoe with more comfort but below average appeal

Celebrity endorsements

11 Does Celebrity endorsement affect your buying decision

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12 Does Opinion leaders represent true picture of the brand

Sales service

13Does availability of exclusive showrooms uplift a brand

14Does availability of the brand online attract people toward the brand

15Do you change shoe brand quite often

Source of Information

16

Does visit to the Retail store of that particular brand provide you important information about the products

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Does recommendation from friends ,family member or neighbours serve as an important information source

18Does Manufacturer or retail websites of the brand provide important information

19 Does Magazine or website reviews serve as an important information

Warranty

20

Is option of extended warranty for extra cost a lucrative offer from the brand

21Is option of replacement for extra cost a lucrative offer from the brand

Nike PumaRed Tape Lakhani Liberty

22Which of the following brands would you prefer

Casual shoe-fancy

Trekking shoe

Leather shoe

Sports shoe Canvas

23 What type of shoe do you prefer?

<Rs.500 Rs.500-Rs.1000

Rs.1000-Rs.2000

Rs.2000-Rs.3000 >Rs.3000

24How much are you willing to spend on shoes?

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Below 18 18-35 35-60 60+

25 Which age group do you lie in?

BIBLIOGRAPHY

http://www.na-businesspress.com/JMDC/TranTP_Web7_2_.pdf

https://gsbapps.stanford.edu/researchpapers/library/rp1938.pdf

http://theglobaljournals.com/paripex/file.php?val=NzQ1 (Perception and Opinion of Students Towards reebok sports shoes.)

http://www.researchandmarkets.com/reports/594216/indian_footwear_industry_analysis

(2012, 02). Indian Footwear Industry. StudyMode.com. Retrieved 02, 2012, from http://www.studymode.com/essays/Indian-Footwear-Industry-907745.html

(2011, 08). Comparitive Analysis of Marketing Stratergies: Indian Footwear Industry. StudyMode.com. Retrieved 08, 2011, from http://www.studymode.com/essays/Comparitive-Analysis-Of-Marketing-Stratergies-Indian-757972.html

http://www.wipro.com/documents/resource-center/library/mass_customization.pdf

http://theglobaljournals.com/gra/file.php?val=MzAx

http://tejas.iimb.ac.in/articles/94.php

http://hh.diva-portal.org/smash/get/diva2:238641/FULLTEXT01.pd

http://www.companiesandmarkets.com/News/Textiles-and-Clothing/Nike-Adidas- and-Reebok-dominating-the-Indian-sportswear-sector/NI6855

http://www.managementparadise.com/knt.nallasamygounder/documents/5495/ consumer-behaviour-footwear-industry/

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